AMD Warns About Counterfeit Chips

UPDATED: AMD is warning customers of potentially mislabeled
PC and server chips after helping foil a counterfeit ring in Taiwan.

As previously reported, the company alerted authorities to a problem in Taipei
late last month. Raids at four sites led to multiple arrests
for "re-marking" or reselling re-marked AMD Athlon, Athlon XP and
Opteron processors.

Re-marked processors have been tampered with and may
have been illegally re-labeled with inaccurate frequencies, model
numbers, or both.

The problem of re-marking has been around for years and the grey market that produces these kind of processors has always been a bit shady, according to Kevin Krewell, a principal analyst for industry research group In-Stat/MDR.

"AMD has had this problem since the days when people re-marked 486 processors to higher clock speeds," Krewell told internetnews.com. "Intel had similar problems as well in the past. Intel began using holographic markings to Pentium II/III processors - in the old Slot 1 module - in an attempt to control re-marking."

AMD spokeswoman Catherine Abbinanti declined to comment on the number
of chips confiscated or their value but said AMD has been
in contact with a large number of its distributors. AMD implemented
several new security measures in mid-2003 to prevent such fraud.

Abbinanti also noted that the counterfeit ring was not likely dealing
with the company's Geode or Alchemy product lines. She also rejected
earlier press reports suggesting that chips ended up in the
European market.

AMD said customers can identify genuine AMD products by a so-called
"Processor-in-a-Box" sticker. The label, which has been in place since
2003, includes a unique serial number and a 3-D hologram used for
tracking, distribution, authenticity and warranty service.

If there are still questions about the authenticity of an AMD
product, Abbinanti said customers should contact their regional AMD
sales office.

This is the third time in less than two years that AMD has responded
to illegal re-mark operations. The situation came to a head in the
Philippines in 2003, which prompted the Processor-in-a-Box sticker. Even
as late as November 2004, the chipmaker helped authorities raid various
shops in Bangkok. That sting seized more than 200
counterfeit AMD packages, approximately 4,000 counterfeit warranty
stickers as well as more than 4,000 fake AMD labels for AMD Athlon 64
FX, AMD Athlon 64 and AMD Sempron processors.

When asked if the company is suffering from a bad link in the supply
chain, AMD commented that the counterfeiters purchased their chips from
non-authorized sources.

AMD said it has only three authorized distributors in Southeast
Asia: Avnet Asia, Intraco Technology and VST Distribution, all based in
Singapore.